Canada Seizes $56M In Customer Funds Without Charges
Authorities have "reason to believe" that TradeOgre funds stem from illicit activity. The investigation remains ongoing.
This week, we reported that the cryptocurrency exchange TradeOgre has been taken offline, and that its funds had been drained for Millions of Dollars. Accompanying the draining of the funds were an op_return message as well as an Ethereum IDM message claiming that the funds were now in custody of the Canadian police.
Yesterday, Canadian authorities confirmed that the exchange has been seized in a press release. In total, the funds now in possession of Canadian authorities amount to over $56,000,000. But the funds seized appear to belong to TradeOgre customers, and no charges have been filed.
The police is now considering whether to forfeit the seized assets as property of the state, the Globe and Mail reports. According to Sergeant Mathieu Lagarde, the Canadian police believe TradeOgre was run by a man in the United States who recently passed away.
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Seizing Customer Funds
TradeOgre was a custodial no-KYC exchange particularly popular among Monero users, where users could sign up with no more than an email address. A file on TradeOgre was first opened by Canadian authorities in June 2024 following a tip from Interpol.
"The investigation found that the platform contravened Canadian laws and regulations," the press release states. "Specifically, it failed to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) as a money services business and did not identify its clients."
However, the funds seized by Canadian law enforcement appear to belong to TradeOgre customers, and not to the operators of the TradeOgre website. "The investigation is ongoing," the Canadian police states, adding that "the transaction data obtained from the platform will be analyzed and charges may follow" – suggesting that no charges have been filed so far; neither against TradeOgre customers nor against its operators. The existence of credible evidence against any wrongdoing of TradeOgre customers is not apparent from the authorities' statement.
Reversing the Burden of Proof
"Investigators have reason to believe that the majority of funds transacted on TradeOgre came from criminal sources," the press release states. "The main attraction of this type of platform, which doesn’t require users to identify themselves to make an account, is that it hides the source of funds. This is a common tactic used by criminal organizations that launder money."
The Canadian police hereby effectively reverses the burden of proof: to get their money back, TradeOgre customers will likely have to prove to authorities that their money did not stem from illegal activities, instead of authorities proving that it did – a process that is not just immensely costly and lengthy, but arguably undemocratic.
The TradeOgre seizure marks "the first time that a cryptocurrency exchange platform has been dismantled by Canadian law enforcement." It is unclear whether the exchange was located in Canada.
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